The colonial government, established in 1683 by Penn's Frame of Government, consisted of an appointed Governor, the proprietor (William Penn), a 72-member Provincial Council, and a larger General Assembly. The General Assembly, also known as the Pennsylvania Provincial Assembly, was the largest and most representative branch of government, but had little power.

Succeeding Frames of Government, also known as the Charter of Privileges, were produced in 1683, 1696 and 1701. The fourth Frame (Charter of Privileges) remained in effect until the American Revolution. At that time, the Provincial Assembly was deemed too moderate by the revolutionaries, who ignored the Assembly and held a convention which produced the Constitution of 1776 for the newly established Commonwealth of Pennsylvania, creating a new General Assembly in the process.

William Penn (14 October 1644 – 30 July 1718) was an English real estate entrepreneur, philosopher, early Quaker and founder of the Province of Pennsylvania, the English North American colony and the future Commonwealth of Pennsylvania. He was an early advocate of democracy and religious freedom, notable for his good relations and successful treaties with the Lenape Indians. Under his direction, the city of Philadelphia was planned and developed.

The province was divided first into 5 counties, plus the three "lower counties on Delaware Bay." The easternmost, Bucks County, extended northwest from Bensalem all the way to what is currently Bradford County, and included not only present-day Bucks County, but also the Poconos, the Lehigh Valley, and Carbon and part of Schuylkill County. Philadelphia County is present-day Philadelphia City (which also happens to be its own county). Montgomery County was west of Bucks and north of Philadelphia, and extended along the Schuylkill River to the area presently known as Minersville, in Schuylkill County. Chester County extended along the southern border of Pennsylvania (the Mason–Dixon line) from Marcus Hook to the western border of the province. The remainder of the province, which is now North Central and Northwestern Pennsylvania, was part of an enlarged Northumberland County (Northumberland County presently sits between Harrisburg and Wilkes-Barre along the Susquehanna River).

"The lower counties on Delaware," a separate colony within the province, constituted the same three counties that constitute the present State of Delaware: New Castle, the northernmost, Sussex, the southernmost, and Kent, which fell between New Castle and Sussex County. Their borders remain unchanged to this day.

William Penn and his fellow Quakers heavily imprinted their religious values on the early Pennsylvanian government. The Charter of Privileges extended religious freedom to everyone monotheists and government was initially open to all Christians. Until the French and Indian War Pennsylvania had no military, few taxes and no public debt. It also encouraged the rapid growth of Philadelphia into America's most important city, and of the Pennsylvania Dutch Country hinterlands, where German (or "Deutsch") religions and political refugees prospered on the fertile soil and spirit of cultural creativeness. Among the first groups were the Mennonites, who founded Germantown in 1683; and the Amish, who established the Northkill Amish Settlement in 1740. 1751 was an auspicious year for the colony. Pennsylvania Hospital, the first hospital in the British American colonies,[2] and The Academy and College of Philadelphia, the predecessor to the private University of Pennsylvania,[3] both opened. Benjamin Franklin founded both of these institutions along with Philadelphia's Union Fire Company fifteen years earlier in 1736.[4] Likewise in 1751, the Pennsylvania State House ordered a new bell which would become known as the Liberty Bell for the new bell tower being built in the Pennsylvania State House in Philadelphia.

Pennsylvania had made mandated fair dealings with Native Americans. This led to significantly better relations with the local Native tribes (mainly the Lenape and Susquehanna) than most other colonies had. The Quakers had previously treated Indians with respect, bought land from them voluntarily, and had even representation of Indians and Whites on juries. According to Voltaire, the Shackamaxon Treaty was "the only treaty between Indians and Christians that was never sworn to and that was never broken."[5] The Quakers also refused to provide any assistance to New England's Indian wars.

In 1737, the Colony exchanged a great deal of its political goodwill with the native Lenape for more land. The colonial administrators claimed that they had a deed dating to the 1680s in which the Lenape-Delaware had promised to sell a portion of land beginning between the junction of the Delaware River and Lehigh River (present Easton, Pennsylvania) "as far west as a man could walk in a day and a half." This purchase has become known as the Walking Purchase. Although the document was most likely a forgery, the Lenape did not realize that. Provincial Secretary James Logan set in motion a plan that would grab as much land as they could possibly get and hired the three fastest runners in the colony to run out the purchase on a trail which had been cleared by other members of the colony beforehand. The pace was so intense that only one runner actually completed the "walk," covering an astonishing 70 miles (110 km). This netted the Penns 1,200,000 acres (4,900 km2) of land in what is now northeastern Pennsylvania, an area roughly equivalent to the size of the state of Rhode Island in the purchase. The area of the purchase covers all or part of what are now Pike, Monroe, Carbon, Schuylkill, Northampton, Lehigh and Bucks counties. The Lenape tribe fought for the next 19 years to have the treaty annulled, but to no avail. The Lenape-Delaware were forced into the Shamokin and Wyoming Valleys, which were already overcrowded with other displaced tribes.

As the colony grew, colonists and British military forces came into confrontation with Natives in the Western half of the state. Britain fought for control of the neighboring Ohio Country with France during the French and Indian War, and following the British victory the territory was formally ceded to them in 1763 and became part of the British Empire.

Gouverneur Morris, one of the leading minds of the American Revolution, lived in New York City during most of the colonial period, but moved to Philadelphia to work as a lawyer and merchant during the Revolution.

Robert Morris, moved to Philadelphia around 1749 at about age 14. He was known as the Financier of the Revolution, because of his role in securing financial assistance for the American Colonial side in the Revolutionary War. In 1921, Robert Morris University was founded and named after him.

Thomas Paine emigrated to Philadelphia in 1774 at Benjamin Franklin's urging. His tract, Common Sense, published in 1776, was arguably the most famous and influential argument for the Revolution. He was also the first to publicly champion the phrase "United States of America."

William Penn, the colony's founder and son of naval Admiral Sir William Penn

James Wilson moved to Philadelphia in 1765 and became a lawyer; he signed the Declaration of Independence and wrote or worked on many of the most difficult compromises in the U.S. Constitution, including the Three-Fifths Compromise, which defined slaves as three-fifths of a person for purposes of census-taking, number of members to be elected to U. S. House of Representatives, and government appropriations.